The coal market, however, is telling a different story. Futures for Australian coal out of Newcastle barely budged Thursday; Australian coking coal spot prices even rose $7 according to ANZ. Which of these signals is right?

Although Australian coal exports might suffer in the short term—if the ban is real—currency markets are likely overreacting.

There could be a geopolitical aspect to the purported ban. But much of what’s going on probably relates to Chinese domestic policy. Beijing spent 2016 shutting down excess coal capacity. The government had hoped to keep the benefits of that painful restructuring—and higher coal prices—for local miners: power utilities were told to keep 2018 coal imports at 2017 levels, according to a separate Reuters report. Not only did this target fail—China’s coal imports rose 3% last year—but they also surged a stunning 227% on the month in January this year, as utilities went on a shopping spree overseas.

It’s possible that word has now come down that another import surge won’t be tolerated. Local port officials in Dalian, hoping to curry favor with Beijing, may have concluded that the best course of action was to stick it to the Aussies. As long as other ports don’t follow Dalian’s lead, it shouldn’t matter that much. Dalian only handles 7% of China’s seaborne coal imports, according to Wood Mackenzie, and 2% of Australia’s global coal exports.

And even if Beijing has concluded that coal imports are a useful lever to threaten Australia, it will be hard to maintain. Local officials are also under heavy pressure to hit pollution targets, and rely on high-calorie Australian thermal coal to help—China’s own coal is largely low heat value, and thus dirtier to burn.

After a sharp improvement in late 2017 and 2018, air quality in northern China has deteriorated again this winter. Keeping the industrial engine running without missing pollution targets requires high-quality coal. And on coking coal used for steelmaking—where Australia has a 50% import market share in China—there aren’t easy alternatives.

If political tensions keep ratcheting higher, Aussie coal might suffer for a while—but a sustained ban would make other Chinese policy goals very difficult to achieve. Don’t cry too hard for the lucky country just yet.